Used Electric Vehicle Buyer's Guide - NYSERDA

If you&#;re in the market for a new vehicle, a used EV may be right for you. To help navigate the process, this guide will cover key considerations when shopping for a used EV, how to claim the IRA tax credit, and the pros and cons of choosing a used vs. new EV.

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Though EVs are cheaper than gas-powered vehicles to maintain and operate, the upfront cost of a new EV can be a barrier for making the switch. But growing inventory, plus the launch of Inflation Reduction Act (IRA) tax credits worth up to $4,000, have made used EVs an increasingly attractive and affordable option for drivers.

As of December , more than 180,000 electric vehicles (EVs) are on the road in New York State . While most were purchased new, used vehicles are becoming an increasing share of the EV market.

If you plan to use public charging stations, getting a used EV with an adapter allows you to charge at different styles of charge ports. For Level 1 and 2 charging, the SAE J plug is the most prevalent. For fast charging via DCFC, most EV models use a Combined Charging Standard (CCS) plug, apart from Tesla. Buyers considering a Tesla EV could benefit from a CSS adapter since all Tesla models have a proprietary charging plug that differs from all other automakers.

Getting access to an EV&#;s telematics connection is essential for an optimal driving experience. Telematics systems provide two-way communication between a smartphone app and the vehicle to manage charging, view range and other metrics, and receive notifications for servicing and maintenance. Access to an EV&#;s telematics is often complimentary for a set duration before drivers are charged a fee, so it&#;s worth checking with the dealer to see if a subscription comes included for a year or more.

EVs are typically sold with a charging cord, but there are other accessories to keep in mind when comparing options and at the negotiating table.

EV charging may be available at work or school, and such locations are ideal for their longer parking durations. When traveling longer distances, public direct-current fast chargers (DCFCs) can charge an EV to 80% in as little as 20 minutes. Note that most PHEVs and some older EVs are not compatible with DCFCs.

Charging at home, if possible, gives convenience and long-term savings, as the cost of electricity is usually cheaper than a public charging station. Using a Level 2 charger at home is recommended for all-electric models for charging efficiency (20-40 miles of range per hour of charging) and preserving the EV battery lifespan. Level 1 chargers, which add around 5 miles of range per hour, may be sufficient for older PHEV models with limited range.

Though public EV charging stations are becoming increasingly available across New York State, it&#;s important to consider where charging is available.

Warranties are usually transferable with an EV sale. Buyers can provide the EV&#;s VIN to the automaker to check when the warranty expires and verify that it&#;s transferable to a new owner. EV owners can consider purchasing an extended warranty if they&#;re approaching the mileage or year that the factory warranty expires.

EV manufacturers are required by law to provide battery warranty coverage for at least eight years or 100,000 miles after the initial purchase, though some automakers offer warranties lasting ten or more years . Warranties cover the EV battery against failure but may also include provisions for replacement if the capacity is reduced below a specified percentage.

If you&#;ve ever owned a vehicle, you may have encountered manufacturer warranties providing coverage for repairs and the car&#;s powertrain for the first several years.

While EV shoppers may be inclined to prioritize the maximum range, the reality is that New York residents drive an average of 228.3 miles each week &#; or in other words, 32.6 miles a day. Thus, many used electric vehicle models can accommodate the majority of New York drivers&#; day-to-day needs, especially if charging at home, work, or school is an option.

Typically, EV battery range degrades by 2% annually. For example, a Nissan Leaf, which was manufactured with an estimated range of 151 miles, could be expected to have a range of approximately 134 miles in . Note that temperatures below freezing and above 95 degrees can reduce battery range by up to 20%, temporarily .

Vehicle range refers to the distance an EV can travel on a fully charged battery. It&#;s important to consider your routine driving habits &#; commuting to work, running errands, or visiting close family or friends &#; when comparing used EV options.

With either EV option, it&#;s still important to evaluate the vehicle&#;s condition, assess the mileage, and get details on past inspections, maintenance, and accidents. Buyers can typically get a vehicle history report from a dealership or car-buying website. Alternatively, the Vehicle Identification Number (VIN) can be used to generate a report with a third-party company.

All-electric vehicles involve less maintenance since they use fewer fluids (e.g., engine oil) and experience less brake wear from regenerative braking. Plug-in hybrid electric vehicles (PHEVs) benefit from regenerative braking and running partially on an electric motor, but they also have internal combustion engines like their gas-powered counterparts that require regular oil changes and maintenance.

However, there are several EV-specific considerations to keep in mind when browsing options.

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Shopping for used EVs involves some of the same questions as any used car: Does the price fit my budget? Is it comfortable? Does it suit my lifestyle?

Rising Used Electric Vehicle Availability

Electric vehicle sales have increased year over year. Nationally, new EV sales have grown from a modest 53,171 in to 326,644 in , indicating a rapid rise in used EV inventory in the coming months and years as early adopters upgrade to newer EV models &#; often with the help of IRA tax credits of up to $7,500 .

In fact, used EV inventory has tripled since and around 190,000 used EVs were sold in the first half of . According to CarMax sales data, these are the five most-purchased used EV models :

1. Tesla Model 3: $37,000 average sale price
2. Tesla Model Y: $47,00 average sale price
3. Nissan Leaf: $23,963 average sale price
4. Ford Mustang Mach-E: $48,015 average sale price
5. Chevrolet Bolt EV: $26,368 average sale price

Based on CarMax&#;s sales data, the average sale prices for both the Nissan Leaf and Chevrolet Bolt EV are near the $25,000 price threshold to qualify for the used vehicle IRA tax credit of $4,000. About 30% of used EVs currently on the market would qualify for the tax credit, which will function as a point-of-sale rebate for buyers starting in .

How to Claim the Inflation Reduction Act Tax Credit for Used EVs

Used EVs purchases in can qualify for an IRA tax credit equal to 30% of the sale price up to a max credit of $4,000. Starting in , buyers can choose to transfer the tax credit to the dealer to lower the price of the used EV at the point of sale, rather than claiming it on their tax returns.

Besides the $25,000 maximum sales price, excluding taxes and fees, qualifying depends on several factors, namely the vehicle model year and buyer&#;s income.

A used EV&#;s model year must be two years prior to the calendar year of the vehicle purchase, meaning that EVs from or earlier will be eligible in .

Additionally, the buyer&#;s income may not exceed the following limits set by the IRS:

• $150,000 for married filing jointly or a surviving spouse
• $112,500 for heads of households
• $75,000 for all other filers

Qualifying is also contingent on buying the used EV for personal use, not being the original vehicle owner, and having not claimed the used clean vehicle credit in the previous three years.

Browse the full list of used EVs models  that meet weight and manufacturer requirements to potentially qualify for the IRA tax credit.

Buying a Used vs. New Electric Vehicle

If you&#;re planning to go electric with your next vehicle purchase, it&#;s worth comparing the pros and cons of buying a used vs. new EV to determine which is right for you.

Used EVs come at a lower upfront cost while still enjoying lower maintenance and operating costs than gas-powered vehicles. The national average price for a used EV in Q4 of was $27,800 , with models under $25,000 qualifying for a $4,000 IRA tax credit. Though powertrain warranties may not transfer from the original owner, battery warranties run for eight or more years, helping reduce the risk of investing in a used EV.

The average cost for a new EV hovered around $48,000 in , though there are notable price gaps between luxury vehicles and more economical and compact models . Several new EVs qualify for both an IRA tax credit and NYS Drive Clean Rebate, resulting in a combined discount of $9,500 for certain models.

The range of used EVs varies considerably depending on the model and year of the vehicle. Older models will have sufficient charge for daily use around town, whereas more recent models often have ranges from 100-200 miles.

The average range for EVs sold in the U.S. in was 291 miles, which significantly exceeds the average New Yorker&#;s weekly driving distance of 228.3 miles . Opting for a new EV could be a better fit for drivers with longer commutes or those living in rural areas where there&#;s currently less public charging available. Drivers that plan to rely on fast charging for frequent road trips may also prefer a new EV, or newer used model, since some older EVs are not compatible with DCFC stations.

This guide offers advice for each step of the complicated process of buying a new or used vehicle.

Also learn about your rights under Oregon&#;s Lemon Law.

Want more information on New And Used RRU? Feel free to contact us.

Before You Go to the Dealer

1. Know the fair purchase price.
   • Edmunds » and Kelley Blue Book » are resources to compare different cars and how much you should expect to pay for them.
2. Do the math.
   • Before going to a dealer, calculate the most you want to spend and then figure out what monthly payments fit your budget. If you negotiate based solely on what you can pay per month, you may end up paying more over the life of the loan.
3. Research your financing options.
   • Often, the best rate is available when the manufacturer is offering special rates. If you are not looking to purchase a new car during a sales event, or are looking to purchase a used car, check financing rates with your bank or credit union. You may be able to pre-qualify with a bank or credit union before you visit the dealer.
4. Know your score.
   • Knowing your credit score will help you determine if you may qualify for better financing.
5. Choose a dealer you trust.
   • Before you do business with anyone, check our Consumer Complaints Database » to see if others have reported problems.

Negotiating the Deal

1. Everything is negotiable.
   • Keep in mind that everything is on the table, this includes:
     • the price of the vehicle
     • the trade-in value of your current vehicle
     • financing options
     • insurance and service contracts
2. Buying a car includes multiple transactions.
   • Buying your new car, selling your old car and financing your new car are three separate steps in the transaction. Approaching your purchase this way will help you understand what you are paying for.
3. Get the best interest rate.
   • Put your research to work. Always ask the dealer if the interest rate being offered is the lowest available. You can even inquire how much the dealer profits.
4. Don&#;t lower your monthly payments by opting for a longer loan term.
   • It may seem like a good idea, but it could cost you thousands of dollars in interest over the term of the loan. Plus, vehicles lose value the moment they leave the lot and continue to do so every year after. The longer the term of the loan, the more likely it is for the value of the car to fall below the amount left on the loan. This creates &#;negative equity.&#; If you sell or trade-in a vehicle and you owe more than it is worth, you have to pay off the negative equity.

We offer the following advice:

1. Take notes.
   • Once you have agreed on a price with a dealer, make written notes of what the agreement is and make sure to include the cost of each item.
2. Bring a calculator.
   • Compare the agreed-upon prices with the prices listed in the purchase agreement. Make sure they match before signing anything. For example, you may think you are getting a great deal on your trade-in, but in exchange the dealer may have increased your interest rate.
3. Take someone with you.
   • Two people are less likely to miss something.
4. Do not believe that additional products or services are free or included in the cost of the car.
   • Verify there are no hidden charges or fees before you start signing the documents.
5. Be cautious of aftermarket add-ons or treatments offered by the dealer.
   • Consider your needs. Some add-ons are unnecessary, or significantly overpriced, and may greatly increase the price or cost of your overall financing.
6. Ask for a copy of the purchase agreement and Retail Installment Contract.
   • It is your right to keep a copy of every document you sign.
7. Request a vehicle history report.
   • If purchasing a used vehicle, search it&#;s vehicle identification number for information about the car.

Closing the Deal

1. Be prepared to walk away.
   • You have no obligation to sign a contract &#; especially if its terms have changed.
2. Make sure that all promises are in writing.
   • If a contract has terms substantially different from what the salesperson initially promised, do not sign the contract unless you are willing to accept the new terms.
3. Take your time.
   • Do not let anyone rush you to sign paperwork without reviewing the terms of the agreement. Read all documents and understand all terms before you commit to them.
4. Get an expert opinion.
   • If you are purchasing a used vehicle, have it inspected by a trusted mechanic. This may cost $100 or more, but could save you thousands in the long run. Be wary of any dealer who resists an independent inspection.
5. Do not lie.
   • Do not allow false information on any forms. Beware of any salesperson who suggests putting false information, such as a higher income, a larger down payment, or false living expenses on your finance application. If something goes wrong, you will be held accountable for that false information.
6. Do not sign a blank contract or application.
   • Do not sign anything that contains blank spaces &#; especially on contracts or credit applications. Draw a line through all blanks on any document you sign.
7. Free DEQ Emissions Test.
   • A used vehicle in good condition will still fail an emissions test if the exhaust sensors have been tampered with or disabled. Visit a DEQ Clean Air Station during a test drive and ask for a free, &#;voluntary,&#; test.
8. Processing the paperwork.
   • A purchaser of a vehicle may negotiate the amount of the document processing fee with a vehicle dealer, but in no case shall the document processing fee charged by a vehicle dealer exceed: (a) $250, if the vehicle dealer uses an integrator; or (b) $200, if the vehicle dealer does not use an integrator (see ORS 822.043 »).
   • If a vehicle dealer charges a document processing fee and uses an integrator, $35 of the fee collected must be paid to the integrator.
9. State taxes regarding vehicle sales
   • State taxes assessed to Oregon dealers, which may be passed along to consumers. These are not taxes assessed by the state to vehicle buyers and should not be listed as government taxes on your purchase paperwork.
     1. Corporate Activity Tax (CAT) »: Oregon vehicle dealers charged this tax may pass the cost of the CAT on to consumers who purchase vehicles from them.
     2. Vehicle Privilege Tax »: Vehicle dealers in Oregon are responsible for paying the one-half of one percent (0.005) Vehicle Privilege Tax on the retail sales price of each taxable vehicle sold. Dealers may collect the amount of the tax from the buyer in the same manner and at the same time as the collection of document processing fees. Not all vehicles are taxable.
   • Vehicle Use Tax »: Applies to taxable vehicles purchased from dealers outside of Oregon that are required to be registered and titled in Oregon.
   • There is no sales tax on any vehicle purchased in Oregon. If you are buying a car in another state, make sure the dealer fills out paperwork for Oregon residents so that you do not have to pay sales tax.
10. In Oregon, you can take a new or used car home before financing is approved.
    • This practice is called &#;spot delivery.&#; It is designed to lock you in to a purchase. If you are tempted to do this, take a moment to read up on the Yo Yo Scam ». There is no 3-day right of rescission for a car purchase or lease, even if you do not yet have final approval of financing. However, if you cannot get financed at the exact same terms for which you signed an agreement, or if financing is not complete within 14 days, you must bring the car back to the dealer and the dealer must give you back your trade-in vehicle and down payment.